This pandemic has made some significant impact on how the economy runs today. Many businesses are facing the heat, but when it comes to Reliance Ltd, things aren’t that gloomy for them.
After having bagged multi-billion dollar deals from major investors in just the last one month, an overseas listing of Jio Platforms is being considered by billionaire Mukesh Ambani’s Reliance Industries Ltd (RIL), said two people, who requested their identities remain anonymous.
RIL’s digital business assets, including Reliance Jio Infocomm Ltd, are housed by Jio Platforms, it also holds the entire Jio connectivity business which includes mobile, enterprise, and broadband Jio Apps, etc. Many investments have also been made in other tech units like Haptic, Fynd, Reverie, Hathaway, Den Networks, and NowFloats.
Jio Platforms managed to raise over $10.3 billion across five deals in the past one month —1.2% to Silverlake for $750 million, a 9.99% stake to Facebook for $5.7 billion; 1.34% to General Atlantic for $870 million, 2.3% to Vista Equity Partners for $1.5 billion, and a 2.32% stake in KKR for $1.5 billion.
Jio Platforms has reached an enterprise value of ₹5.15 trillion within just six months of its launch, this makes it stand neck to neck with other major platforms like Tencent, Alphabet, and Alibaba, which are basically debt-free and also have large digital ecosystems in their arsenal.
RIL is looking for simultaneously listing Jio Platforms. But for this to happen, the market sentiments, domestic and global conditions must greatly improve. Also, this overseas listing could provide an opportunity for private equity investors to avail of a better exit.
With all these deals in place, RIL has pretty much solidified Jio’s position as a global platform This could also assist the company’s IPO plans, which have been in the works for a few years now,” as said by a domestic broking firm analyst.
Reliance Jio was launched in September 2016 and in just a short span of 4 years, it has managed to become India’s largest telecom operator.
Right after the Centre’s announcement on simplifying the process of direct overseas listing, came Jio’s announcement of the same. These changes were brought in to increase capital availability for homegrown companies. But rules regarding tax-related and foreign exchange management act changes have not been notified yet.
After about three decades, RIL is planning on tapping the domestic capital markets to raise about ₹53,000 crores through a rights issue. It is proposed that existing shareholders of RIL are offered one new share for every 15 held at ₹1,257 apiece. Those who subscribe to the rights issue are expected to pay ₹314.25 per share at application time and the remaining ₹942.75, in one or more tranches.
RIL has a major objective to become a zero net-debt company by the end of March 2021 and all the rights issues and stake sales are all part of its plan to achieve the same. As of 31st December 2019, the company’s net debt was valued at ₹1.53 trillion.